Selling the airport, Part 1

November 27, 2010

LAKE CLEAR - The town of Harrietstown wants to put the "regional" back in Adirondack Regional Airport.

Town officials and the airport's management team are redoubling efforts to raise awareness of the airport and its economic impact on the region. The campaign, which has included presentations to county lawmakers and letters sent to area town supervisors, is also meant to drum up additional funding for the airport, whose outside municipal support is about a third less than what it was 10 years ago.

"I believe the town of Harrietstown is too small to be owning and operating an airport," said Harrietstown Supervisor Larry Miller. "I believe this is a regional asset and needs to be treated that way. I believe that everybody who benefits from this regional asset should have a say in how it's operated."

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Players from the St. Norbert College hockey team arrive at the Adirondack Regional Airport in Lake Clear in March. The team chartered a 737 jet from Green Bay, Wis., to compete in the NCAA final four tournament in Lake Placid. (Enterprise file photo — Lou Reuter)

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Town officials say they have been working to reduce the airport's tax burden on Harrietstown residents.

In 2005, the portion of the town tax levy attributed to the airport was $127,000. Four years later, the airport's share of the tax levy was down to $61,844.

"The year when I became supervisor, (Councilmen) Ron (Keough), Barry (DeFuria) and I made a commitment to the public that our goal was to eliminate that dollar amount from the taxes, so that the airport was totally self-sufficient," Miller said. "We had reduced it over that five- or six-year period. We got the rate down."

That all changed, however, by the fall of 2009. Jet fuel revenues plummeted because of a recession-driven drop-off in private and corporate jet traffic. The airport's share of the town tax levy ballooned to $205,287.

"Obviously, we took a big hit," Miller said. "It's a business. We live or die on our fuel sales."

At a budget hearing that fall, irate town residents said the town should get other local municipalities to contribute more to the airport or close its doors.

"If people aren't chipping in to assist you in paying for that airport, then it's time to reconsider that airport," Saranac Lake resident Jon Vinograd said at the hearing.

Town officials asked the Federal Aviation Administration what they would have to do to shut the facility down. The FAA said the town would have to stop accepting federal and state funding and continue operating the airport for another 20 years before it could be closed.

"Because there's so much federal and state money in here, we just can't turn the key and walk away," Keough said.

"To close the airport is not an option," Miller said.

Unwilling to shut down the airport and convinced that it has a significant economic impact, the town is focused on marketing the facility, finding new ways to generate revenue, securing more support from other municipalities and looking at other ways to run the airport.

Outside support

Financial support of the airport from six area towns - Brighton, Franklin, North Elba, St. Armand, Santa Clara and Tupper Lake - and Essex and Franklin counties has decreased from roughly $40,000 per year to about $25,000 over the last 15 years.

Some towns - St. Armand and Santa Clara, for example - have consistently supported the airport every year with contributions ranging from $2,000 to $3,000.

But other municipalities have been less reliable. North Elba gave the airport $14,000 each year from 1994 to 2004, reduced that contribution to $8,000 in 2005 and cut it entirely in 2007 and 2008. The town of Franklin hasn't contributed to the airport in any of the last five years. The town of Tupper Lake used to give Harrietstown $6,000 a year. Last year it gave the airport $1,000.

Since none of the other towns or counties, apart from Harrietstown, have an ownership stake in the airport, they are not required to support it. That means the current way of securing outside financial support for the airport, as unpredictable as it is, will likely continue.

But it wasn't always that way.

Airport district

From the mid-1960s until 1991, the airport was managed as a loosely-knit district that included all seven towns.

"All the town supervisors sat on the airport district," said Keough, who was Harrietstown's supervisor in the 1980s. "The seven towns met every month and took care of the budget. Everybody pooled their money and all the expenses for the airport were paid by the airport district."

Keough said the airport benefitted from the arrangement because it gave the other municipalities a say in how it was run.

"When the supervisors went back to their boards and said they wanted to put money in for the airport, they knew what was going on," he said. "There was a very strong feeling of ownership from the stakeholders in the other towns, and that helped a lot."

But the district, which was only bound by a "gentleman's agreement," had no clear legal and administrative framework, and was disbanded in part because of liability concerns among the surrounding towns.

The towns continued to provide financial support to the airport in the form of service or marketing payments, but their sense of ownership faded, Miller said.

"I think it was neglect on Harrietstown's part," he said. "They got complacent and didn't do the homework going around to the towns to prove to them what an asset the airport is."

The sales pitch

Miller, who was elected town supervisor in 2001, said he has worked with Keough and DeFuria to convince the other townships that the airport is a regional asset worth supporting.

In recent months, town officials have stepped up that campaign. In October, Airport Manager Ross Dubarry and Assistant Manager Corey Hurwitch met with Franklin County legislators and the Essex County Board of Supervisors. Miller said he plans to have Dubarry speak to local town and village boards, service organizations like the Rotary Club and other groups in the coming year.

In September, Dubarry wrote to the supervisors of the six surrounding towns and Essex and Franklin counties asking for their financial support and encouraging them to take a tour of the airport.

The letters cite a 2002 economic impact study of the airport, which found the facility supported 117 jobs and had an economic impact of $8.1 million on the Tri-Lakes region. The town now estimates that impact is closer to $15 million because it followed through on a business plan that was part of the study.

To further highlight the airport's economic impact, the letters identify corporate aircraft owners in each town who are airport customers. The town of Brighton's letter, for example, notes that Camp Topridge, owned by Texas real estate mogul Harlan Crow, has an assessed value of $5.8 million and generates $94,211 in school and county taxes.

"Without the existence of the Adirondack Regional Airport with our more than 6,500-foot runway and instrument approach, many of these home owners and aircraft operators would likely have chosen another location with convenient access," the letters read.

"It's not just assessments, it's also jobs," Miller said. "Those second home owners have caretakers, security staff and hire local contractors. If the Big Tupper development ever gets off the ground those people are going to fly here, park their jets and go to Tupper Lake. That's an economic impact. You can go on and on."

Town officials also say the local economy has benefited from the $18 million in federal funding the airport has collected over the last 10 years for various projects.

"Luck Brothers, a local contractor, did a lot of work here," Miller said. "Rabideau Corp. revamped the terminal's second floor. Contractors come in, they stay here, eat here, buy things here. They get blacktop for our runways at the quarry. It's a big cycle and it produces jobs here."

Harrietstown's sales pitch this year was somewhat successful. Several municipalities - including North Elba, Tupper Lake, Brighton and Essex County - increased their contributions.

"I think they make a pretty good case that the airport does have value and we should all support it if we can," said Brighton Supervisor John Quenell.

But other municipalities weren't convinced or just didn't have the money to spare.

"In this current economic climate with decreasing revenues and increasing costs, we don't have the money to spend on the airport," said Art Willman, supervisor of the town of Franklin, which gave no money to the airport this year for the fifth year in a row. "Also, I don't know if there's really anyone from the town that does use that airport. There might be some objection on the part of taxpayers to contributing to that funding."

Other options

DeFuria said the town had offers to lease the airport twice in the past, but each deal fell through. He said he's open to looking at any other way to run the facility.

"If we can find a way that will enhance that airport, even if that meant selling it to someone, I'm open to it," he said.

Making the airport an independent authority that's free from the reins of government could be one way to ensure the facility is supported long-term, Miller said.

"It would take the politics out of the airport," he explained. "It would make them their own operating authority, so they could bond without needing approval from a municipal government."

But the process of creating a new authority, which would require approval of the state Legislature, is complicated, DeFuria said. It would still need to be supported by the taxpayers, but those costs would be spread across the towns that are located in the authority's operating area. Getting the towns to agree to that wouldn't be easy, DeFuria said.

"How are you going to get all these townships together when a lot of them don't even support the airport to begin with?" he asked.

It's also something that has been tried before. The town looked into the idea of an airport authority after the airport district disbanded in 1991.

"Creating an airport authority would give the airport a steady funding base, bonding authority and the ability to more easily go after state appropriations," reads an Enterprise editorial from March 22, 1991 endorsing the authority concept. "Most of all, however, it would provide the mechanism to ensure petty politics and power games do not hinder the opportunity for real growth and stability at the airport."

Miller thinks the idea is worth looking at again.

"I know people say this airport is my play toy and things like that, but I firmly believe in this thing," he said. "I know that if this airport is run properly and it is afforded the opportunity to grow that it will be a huge economic impact on this area. It can't go anywhere but upwards."